Is Silicon Valley a Seller’s Market. ABSOLUTELY! Is Silicon Valley a Buyer’s market. YOU BETCHA! Whoa Jorge, what’s with the double talk. You sound like our presidential candidates. The correct answer is “it’s depends” You see there are many factors that determine what a seller’s market is, despite what you may have heard at a party or a neighborhood BBQ. So for today’s example we will use Almaden Valley. You can also check Almaden stats at www.AlmadenRealEstate.info.

In 2016 thus far, the “average” house is selling for $1,457,258 (I don’t use median as median is pretty meaningless in real estate). This is up $55,322 from 2015. Currently there are 59 active listings. Let’s break thus down to three sections. There have been 233 of which 140 (60%) were under the average. Of the 140 sold listings, the average days on the market was 23 days. Not bad.

The next group will be from $1,457,258 to $2M. There are 75 properties in this group (32%) with a average days on the market of 31. Still not bad.

The last group is the focus of today’s posting. The last 7%. In the case of Almaden (each area will be different), $2M Plus. In 2016 there have been 18 sales over $2M which includes two sales over $3M. In 2015 there were 29 sales over $2M which included two sales over $3M. Currently there are 15 listings in Almaden over $2M. There average days on the market is 129 and growing daily. Six of those listing are over $3M. As stated above, in 2015 there were 2 sales over $3M, we have already sold two $3M properties in 2016 and there are still six unsold listings.

So as you can see, you need to break areas down into price ranges before you throw out terms like Buyer’s or Seller’s markets. Under the average Almaden Valley has a solid Seller’s Market in place. Over the average but under $2M, still a good seller’s market but a bit softer. Over $2M, pretty much a solid buyer’s market.

This is for Almaden Valley and each area is going to be very different. In Los Gatos or Saratoga for example, $2M to $3M may be a Seller’s Market as an example. East Side San Jose the Buyer’s market could start at $800K.

The take away is a property is only worth what a qualified and willing buyer is willing to pay for it and what a leader will loan on it. Doesn’t matter what you think your property is worth or what “you want” or “what you need” or neighbors house sold for two years ago. It’s about what someone is will to pay and what the appraisal come in at. So price it right the first time!!!

So far this year Blossom Valley has had 387 closed escrows thus far this year. The average days on the market is 18 days. But let’s break that down even further.

79 of 387 or 20% sold in 7 days or less.161 of 387 or 42% sold in 8 to 14 days

55 of 387 or 14% sold in 15 to 21 days

26 of 387 or 7% sold in 16 to 30 days

So you can see 75% of all sold properties in Blossom Valley in 2016 sold in 21 days or less and 83% sold in 30 days or less.

You will also find that 65 properties (17%) took longer than 30 days to sell. On average, these properties that took over 30 days received an average of $3175 LESS THAN LIST PRICE or on average $473 per square foot.

The 240 (62%) properties that sold in 14 days or less sold for a average of $43,809 MORE THAN LIST PRICE or $509 per square foot.

Have sales slowed down in Almaden? Yes and no. It comes down to price range. As you can see of the 375 sales in 2015 the average sales price was $1.4M while the average active listing is almost $1.8M. Big disconnect. So well priced homes are selling extremely fast while larger homes are selling but at a much slower pace. So you see here is a disconnect between the selling sweet spot and what some sellers are asking. www.AlmadenRealEstate.info

Have sales slowed down in Almaden? Yes and no. It comes down to price range. As you can see of the 375 sales in 2015 the average sales price was $1.4M while the average active listing is almost $1.8M. Big disconnect. So well priced homes are selling extremely fast while larger homes are selling but at a much slower pace. So you see here is a disconnect between the selling sweet spot and what some sellers are asking.

Here you go Almaden Valley. Have sales slowed down in Almaden. Yes and no. It comes down to price range. As you can see of the 178 sales in 2015 the average sales price was $1.4M while the average active listing is $1.7M. Big disconnect. So well priced homes are selling extremely fast while larger homes are selling but at a much slower pace. They have been 15 sales over $2M this year out of 178 or only 8%. Currently out of 45 active listings, 14 out of 45 are over $2M or 31%. So you see the problem

I know you have all seen the For Dummies books out there. There are For Dummies books for everything from how to work your iPhone, how to use SalesForce to how to choose the right dog. Pretty much anything. You should check them out at : http://www.dummies.com/.

Now I have to admit that I’ve never read any of the For Dummies books personally. I’ve seen them at the local office supply stores. I’ll be standing there with my grossly overpriced HP ink cartridges and I’ll see them near the checkout. There will be a For Dummies book with a intriguing title and it always seem to make sense in a odd way. Stuff you would never thing they would right an entire book about, but there it is.

So I decided to entitle this BLOG entry, “Pricing your home for Dummies”. Why you ask? Well based on some data I’ve seen there appears to be a need for a short, clear and painfully blunt explanation, in For Dummies terms, how to manage a home listings Day on Market.

Days on market (DOM), alternatively Active Days on Market, is a real estate term used to describe the age of a real estate listing. Typically, properties with a large DOM will command lower prices than a property with few DOMs because buyers perceive the property as over priced or less desirable. DOM is often used when developing a pricing strategy. DOM can also be used as a “thermometer” to gauge the temperature of a housing market.

In many respects, DOM is more important that the price. The older the listing, the less visible it becomes. With our MLS rules, the listing needs to be off the market for 30+ days to be relisted and to “reset the clock”. In prior years all you had to do is relist or change brokers to start the clock again. This was not a true representation of the true days on market and they change the rules, for the better in my opinion.

During the short sale market, which was been beaten up quite a bit, the average days on the market increased. This is because of distressed properties (i.e. Short Sales and REO’s) and due to the fact that people actually have to qualify for a loan now. No more fogging up a mirror and you are approved for a 100% loan.

For example, in Almaden where I live, the average DOM was 46 days back in 2010. In 2011 it jumped up to 68 days due to the sales on some very old listings. Despite what the media is saying, the well priced homes were still selling fast, many time with multiple offers in a few days. Back in the days before the crisis, no Short Sales and easy loans, it was well under 30 days, with many new listing selling less than 3 days. In 2014 the DOM dropped to an average of 24 days. So far in 2015, Almaden is averaging 28 days.

Now that the prelims are over, I present to you the “Nowicki Guide to Days on the Market Management…. For Dummies”. Fair warning. This is painfully blunt.

1-7 Days New ListingThe best time to sell a property, and to see the highest offers is in the first seven days. Agents see these pop up on our daily searches and most search engines now have a sort by days on market. Always try to price your property to get a lot of activity in the first 7 days. Out of the 91 sales in Almaden for example, 20 or 22% were sold in 7 days or less.

8-30 Days Active ListingStill an active property but no longer “new” from an agent’s perspective. Your goal should be to sell your property in 30 days or less to achieve the highest yield. Be proactive. I always have a proactive plan in place with my sellers when I take a new listing to review the progress of the sales well before we get to 30 DOM. Again out of the 91 sales in Almaden in 2015 so far this year, 52 or 57% were listed 8 to 30 days. That’s a total of 69% of all sold listings for those keeping count.

31-60 Days Stale Listing This is a tricky one. This is where most folks end up selling their properties, at slightly less than asking price. At this point if you don’t have an offer in hand, you need to sit down with you agent and reevaluate your pricing and marketing of the property. The clock is ticking. Everything sells at the right price.

61-90 Days Life Support ListingYou never want to get to this stage. It’s not dead yet but it’s vitals are not looking good. It’s pretty much off the radar for most buyer’s agents and buyers believe that there must be something wrong with the property. Your neighbors are concerned. If you do get offers, most of the time you are looking at low ball offers from smart buyers willing to “help you out” for a price. Basically, you have waited too long to take proactive action. You are in reactive mode now and time is running out. You are up against fresh new listings every single day. You now need to be extremely aggressive to get Internet eyes on the properties and human feet in the door. Start thinking of incentives and assistance for perspective buyer’s and higher commissions for buyer’s agents.

91-120 Days Last Rites ListingPretty much dead inventory at this point. Think of this as a listing in a coma. It’s alive by not by much. Pretty much just sits there, with few signs of life. Pretty much forgotten by everyone but the people who has to change the bedpan. Everyone assumes that you greedy, the property is grossly over priced or there is something majorly wrong with the property, or “why else wouldn’t it sell?” You waited too long trying to “get my price” and if you do by some miracle get an pity offer, it will be well under what you listed it at, which may have been the true value in the first place, minus some percentage for your lack of proactive pricing and marketing.

121-150 Days Dead ListingsPushing Daisies. Taking the big dirt nap. Farting dust. The fat lady has sung. Elvis has left the building. And so has your listing. Your property is now considered a “career listing” by your agent who has spent way too much time and money marketing an overpriced listing. You blame your agent for your lack of realistic pricing. You figure your agent must not have done his or her job, because you the seller, overpriced the property based on what you wanted, not what the property is actually worth. The agent doesn’t set the price. You do!!! Work with your agent up front when you first list the property to set weekly milestones in regards to marketing and pricing. At this point, you might want to consider taking it off the market for a extended period of time, regroup, fix the place up with input from your agent who hopefully has been gathering info from open houses and agent showing follow up. People need to forget this was on the market forever. When you relist, make it a big deal. Pull out all the stops and be realistic. Any smart agent is still going to look at the property history. Give them a reason to show the property again or for the first time to his or her clients.
151 and Over Archaeological FindDead and buried deep as a T-Rex. It could sell. Heck, anything is possible. But statistically speaking, it’s been over for a very long time. Your listing is the joke at the local brokers tour. Your neighbors are upset with you. The paint is peeling off of your For Sale sign. Buyer’s aren’t interested in dealing with a unrealistic seller. And the term they use is not “Unrealistic.” They are not quite so kind. Buyer’s agents want to find a win-win for their clients. They don’t mind making you a lowball offer. Often times it’s something you would consider insulting. Gee, Skippy, whose fault is that? You would do the same thing if you were in their shoes. From their perspective, they are giving you a get out of jail card, for a price. At this point, any offer is a good offer. You have wasted a lot of time and money at this point. Time to regroup, rethink and relist after being off the market for a extended period of time. Bottom line. Do your research before listing. Work with a agent who will be blunt, and honest with you. And most important.

Interesting note. There is a property pending that was listed at $4.3M. The highest price ever paid for a Almaden Valley SFR was $3.7M. It will be interesting what this property actually closes for. In the history of Almaden Valley, there have only been 7 sales over three million.

I guess “they” (whoever “they are”) are calling it “I guess “they” (whoever “they are”) are calling it “STORMAGEDDON” Sounds pretty scary to California folks. Anyway, they are expecting flooding and high winds, meaning trees falling on power lines. So here are some helpful pointers you might want to consider before the storm hits.

STORM TIPS

1. Before the storm: Have an emergency plan and a disaster kit, with plenty of flashlights, batteries, food and water in case a power outage lasts longer than anticipated.

2. Keep liter-sized soda bottles filled with water in the freezer. These can be placed in the refrigerator in an outage to keep food cold longer.

3. Keep extra gas in vehicles and have cash on hand — in the event of an outage stores may not be able to take credit or ATM cards.

4. Keep property clean of leaves and other debris that may flow into streets, curbs and gutters, and do not pile yard waste around catch basins. Leave room for street sweepers to collect debris.5. Check that objects around home are secure and can’t be blown away. Bring them in or tie them down. For example, Christmas decorations.

6. Get sandbags from city or county if needed.

DURING THE STORM

1. Be especially careful on the road — a leading cause of death and injury during winter storms is traffic accidents. Keep more distance than usual between cars and adjust speed for conditions.

2. Telecommute or avoid driving during a wet rush hour, if possible. Remember chains for higher altitudes, and notify someone about your travel plans. Never drive through standing water.

3. Gusty winds and strong stormy conditions can cause high surf conditions at the beach. Be especially cautious, stay aware of the surf and never turn your back on the water.

4. Stay warm — the storm is expected to bring cold weather conditions throughout the Bay Area and the Sierras. Dress warmly in multiple layers of lightweight clothing and keep your head covered.IN CASE OF A POWER OUTAGE :

1. Treat low-hanging and downed power lines as if they are energized and extremely dangerous and be aware that trees, pools of water and other objects that may be in contact with lines.

2. Report downed lines to 911 immediately and then notify PG&E at 800-743-5002.3. To prevent fire, use battery-operated flashlights and not candles. If candles are necessary, keep them away from drapes, lamp shades, holiday trees and children. Do not leave candles unattended.

4. Generators should be properly installed by a licensed electrician in a well-ventilated area.

5. Unplug or turn off all electrical appliances to avoid overloading circuits and to prevent fire hazards when power is restored. Leave a single lamp on to alert you when power returns and turn appliances back on one at a time.

Willow Glen here is your Real Estate report for the first 11 months of 2014. The all time historic high for Willow Glen was in 2007 with an average sales price of $939,318 or $519 per square foot. For the first 11 months of 2014, the new all time high is an average of $1,072,301 or $559 per square foot. It’s a great time to be a seller in Willow Glen as the bidding wars continue.

The Almaden Real Estate Information Center was created by George Nowicki of Realty World to help Almaden Valley Buyers, Sellers and Investors access the most current statistics, data and information for the highly desirable Almaden Valley area. If you need more specific and more timely information please contact me at George@Nowicki.net

Most areas in Silicon Valley hit their all time highs in 2007. Blossom Valley high their all time high in 2006. This was driven mostly by the fact that Blossom Valley has historically been a great time for first time buyers and because of the low interest loans and zero percent down loans from 2002 and 2006. As such the run up in Blossom Valley was seen before some other areas. On the flip side, being that so many of the purchases were high risk with low or no downpayment loans, Blossom Valley was one of the areas that saw a large percentage of foreclosures, short sales and REO’s from 2008 through 2011. Currently for 2014 Blossom Valley is at an average cost per square foot of $421 compare to it’s all time high if $440 in 2006. Not quite at it’s all time high of 2006 but pretty darn close.

2006 $440 average per square foot
2007 $429 average per square foot
2008 $349 average per square foot
2009 $301 average per square foot
2010 $310 average per square foot
2011 $287 average per square foot
2012 $309 average per square foot
2013 $384 average per square foot
2014 $421 average per square foot – Year to Date

I purchased my very first rental property in Campbell in 1985 for $145,000 or about $106 per square foot. In 2007, at the all time high, the average Campbell home was $852,398 or $519 per square foot. By 2009 the average dropped to $700,334 or $418 per square foot.

Last year we saw a major jump in the average sales price in the area from $739,978 or $441 per square foot in 2012 to $878,325 or $507 per square foot in 2013. So far this year there have been a total of 192 sales with an average sale price of $1,010,779 or $598 per square foot. A NEW RECORD HIGH.

Here are the details:

Year Total Sales Average Sale Price Average Square Feet Average Cost Per Square Foot

So what does it all mean? Well, first off these are averages. Every house will be different based on age, upgrades, schools, location deferred maintenance, lot size, design etc. Historically the average house in Almaden is about 2300sf. As you can see from the numbers above the unsold inventory is averaging $3,187sf and coming in at $554 per square foot. The properties that are pending are averaging 2,697sf and $532 per square foot. The average of the 230 sold units this year are coming in at $2,451sf and $527 per square foot. As you can see there is a disconnect between the active inventory at $554 per square foot and the propertes that are selling at $527 a square foot meaning that a lot of 35 active listings (22 of 35) are well over the average sale price of $1,267,129. The take away is that a lot of the larger homes (19 of 35) are not selling and the more “average” homes are selling very fast, thus skewing the numbers and making the active inventory seem high. For example, for the first seven months of the year, only 8 properties in Almaden Valley (or 3%) have sold over $2M and zero properties over $3M. Currently there are 9 properties listed over $2M and three of those are listed at $3.2M, $3.5M and $4.9M. That comes out to 25% of the active inventory is over $2M compared to only 3% of the sold properties. A very large disconnect so you can see and understand the difference between the large gap in the Average Cost Per Square Foot between the actives (not sold yet) and the sold properties.

The second take away is how long does it take to sell a home in Almaden? In the first seven months of the year, 173 of 230 properties sold in 14 days or less or 74%. Oon average, these properties sold for $74.5K over list price and a average list price of $1,164,065 and a sale price of $1,238,480. On the flip side, the average sold property that listed for more that $2M sold for $33.9K less than asking and took an average of 22 days to sell.

Willow Glen here is your Real Estate report for the first 6 months of 2014. The all time historic high for Willow Glen was in 2007 with an average sales price of $939,318 or $519 per square foot. For the first six months of 2014, the new all time high is an average of $1,049,654 or $561 per square foot. It’s a great time to be a seller in Willow Glen as the bidding wars continue.

Willow Glen here is your Real Estate report for the first 6 months of 2014. The all time historic high for Willow Glen was in 2007 with an average sales price of $939,318 or $519 per square foot. For the first six months of 2014, the new all time high is an average of $1,049,654 or $561 per square foot.

It’s a great time to be a seller in Willow Glen as the bidding wars continue.

The Almaden Real Estate Information Center (www.AlmadenRealEstate.info) was created to give Almaden Valley Buyers, Sellers and Investors access the most current statistics, data and information for the highly desirable Almaden Valley area. If you need more specific and more timely information please contact me at George@Nowicki.net

The highest price home in Alamden that has sold this year was $1695,000. The average sales price thus far this is $1,125,990. There are currently 8 properties over $1.5M out of the 25 active listings or 31% of the active listings.

Committing ANY of these acts can dramatically alter your credit score or debt to income ratios and can even block your chance of closing on your home purchase.

1. Thou shall not change jobs or become self-employed.
2. Thou shall not buy a car, truck or van unless you plan to live in it.
3. Thou shall not use your credit cards or let your payments fall behind.
4. Thou shall not spend money you have saved for your down payment.
5. Thou shall not buy furniture before you buy your house.
6. Thou shall not originate any new inquiries on your credit report.
7. Thou shall not make any large deposits into your bank account.
8. Thou shall not change bank accounts.
9. Thou shall not co-sign for anyone.
10. Thou shall not purchase anything until (way) after the closing.

As you can see from the numbers above, the average sold house price is much lower than the average active listings. $1,433,742 vs. $1,073,758 or a difference of $359,984. This difference implies that there are quite a few properties in Almaden Valley at the higher price ranges that are not selling as you can see. So when you see 51 active listings, you must understand that 30 of the active listing are above the average sale price of $1,073,758. While it’s great that the higher end properties are selling, they do take much longer to sell.

As you can see from the numbers above, the average sold house price is much lower than the average active listings. $1,498,857 vs. $1,054,663. This huge $444K difference implies that there are quite a few properties in Almaden Valley at the higher price ranges that are not selling. There have only been eight sales over $1.5M and of that only three sales over $2M. Currently there are 21 active listings over $1.5M or 44% of the active inventory.

Spring Cleaning Guide

Make spring cleaning less of a chore by following these smarter–and mostly greener–tips for this annual rite of homeownership.

Bathrooms

When it’s time to get down and dirty, many people start with the bathroom. Allen Rathey, founder of The Housekeeping Channel, says removing mineral deposits, rust, and such from toilets doesn’t have to mean chemical warfare. Don rubber gloves and use a pumice stone to erase stubborn stains. If you want more scouring power, Rathey recommends mixing baking soda with acidic vinegar. The concoction is just as effective as conventional cleaners, and there are no toxic fumes to inhale. This approach works equally well on tub and shower stains.

Buy your supplies in bulk to save. A 64-ounce bottle of vinegar costs about $4; a 12-pound bag of baking soda, about $7. Both items can be used throughout the house. For just $1 you can mix equal parts vinegar and water in a 32-ounce spray bottle to make a terrific all-purpose surface cleaner. That’s about $4 cheaper than buying a spray cleaner at the store.

Spring cleaning is the perfect time to extract dirt from porous grouted surfaces. For tile floors use your usual cleaner, but don’t mop. Instead, run a wet/dry vac, which will suck contaminants out of the grout. Mopping drives the grime into the grout rather than removing it. According to Rathey, grout can harbor stinky bacteria that leave a bad odor in the bathroom. This technique is more time-consuming than mopping, but it’s worthwhile to do at least once a year.

Kitchens

The kitchen can be a tough room to clean because there’s usually so much stuff in it, says Justin Klosky, founder and creative director of The OCD Experience, an organizational service. Before you break out the broom, go through your cabinets and drawers, and put together a box of items to donate and a box of items to store somewhere besides the kitchen. Clear your countertops of everything except items you use nearly every day.

After you’ve de-cluttered, you can get to work cleaning. Cloud Conrad, vice president of marketing for cleaning company Maid Brigade, says one tool you shouldn’t overlook is an all-purpose microfiber cloth (about $5). These aren’t run-of-the-mill dusting rags. Microfiber is a densely woven synthetic fabric that picks up dirt and greasy deposits without chemicals thanks to its unique composition. You should be able to clean surfaces like countertops, sinks, and stoves with warm water, a microfiber cloth, and a bit of elbow grease, Conrad says.

Since you prepare your food in the kitchen, consider using green commercial products for surfaces, or make your own vinegar/water spray. Conventional cleaners may remove dirt, but they can also harbor some nasty substances you don’t want in your PB&J. Microfiber, vinegar, and baking soda will clean and disinfect almost every kitchen surface at a fraction of the price. Don’t neglect once-a-year chores like vacuuming refrigerator coils (unplug your fridge first), and tossing out expired food from the back of the pantry.

Bedrooms

Since bedrooms are such individual spaces, there’s a lot of diversity in what needs to happen. Most homeowners should at least rotate and flip innerspring mattresses, and store out-of-season sheets and clothing. Also go through your closet, and donate or Freecycle items you haven’t worn in the last 12 months. For carpets and mattresses, consider using a professional cleaning service. Figure a typical mattress will cost about $70-$90 to clean, a bargain considering how much time you spend in bed.

Even if you’re getting your carpet professionally cleaned, you still need to break out the vacuum, says Leslie Reichert, owner of The Cleaning Coach. Use the hose attachment to get to the hidden particles along baseboards, under your bed, and in your curtains, favorite environments of dust mites. If you have a large-capacity dryer, throw curtains in on high heat for good measure to kill the little pests.

Living area

Another surface you should consider getting professionally cleaned is living room upholstery. It can be tricky to know exactly how to deep-clean different types of fabrics, says Rathey, especially if there are stains you can’t quite identify. Costs vary widely depending on the size of the furniture piece and the quality and state of its covering, but a typical sofa might run $70 to $90.

Microfiber cloths are great to use in the living area as well. Make sure you have cloths for each area of the house, though, so you’re not cross-contaminating bathroom, kitchen, and living areas. Use a damp microfiber cloth to wipe down windows, wood, mirrors, the tops of bookshelves, ceiling fan blades, and even the plastic housing of electronics for a quick, chemical-free clean.

Foreclosures ticked up in January nationwide as more banks continued to work through backlogs of defaulting mortgages on their books, RealtyTrac reports.

For more than five years, Nevada has been the state leader with the highest rate of foreclosure filings in the country. In January, one in every 198 homes received a foreclosure notice in the state.

Still, Nevada is seeing progress: The state saw an 8 percent decrease in foreclosure activity from December to January, and filings were down 52 percent year-over-year. Here are the states that are still facing the highest foreclosure rates in the nation:

While Nevada may still have the highest rate of foreclosures among states, some individual cities are seeing even higher rates of foreclosures. The worst hit-place for foreclosures is Stockton, Calif., in which one out of every 140 households received a foreclosure notice in January. In fact, nine of the country’s top 10 highest foreclosure rates were in metro areas in California — with Las Vegas the only city outside of that state on the list (ranked at No. 5).

Silicon Valley in California is already known as a high-priced area, but an anticipated crop of new Facebook millionaires is expected to send housing prices even higher.

“I’m kind of worried — a thousand millionaires are going to be buying houses!” says one buyer looking for a home in the area.

Silicon Valley is the home to Facebook, and with Facebook shares soon to be sold to the public, Facebook employees are expected to see a big jump in their paychecks.

Just the anticipation may send home prices higher, The New York Times reports.

Ken DeLeon, a Silicon Valley real estate agent, says the signs are already there: More homes last month sold for more than their asking prices, and by significant amounts above the asking price too.

DeLeon says he plans to market his real estate services to Facebook employees by purchasing ads — of course, on Facebook.

He expects some sellers will keep their homes off the market until the Facebook rush happens, although he says some investors may want to get a jump on the market by buying up homes now that they plan to tear down and rebuild.

Already, eight of the country’s 20 priciest housing markets are in Silicon Valley or the Bay Area, according to a 2011 Coldwell Banker study.

Cash buyers are sending home values down much lower than they otherwise would be, suggests a new survey by Campbell Inside Mortgage Finance, which polled more than 2,500 real estate agents nationwide.

In its December Housing Pulse Tracking Survey, the company found that investors accounted for one out of three real estate transactions last month, and about 74 percent of those purchases by investors were made using all cash.

“Investors have an over-sized command on the market since their ability to pay cash in the majority of transactions puts undue downward pressure on home prices,” an article at Housing Predictor notes about the study.

Cash buyers can be attractive to home sellers, banks, and mortgage companies, since they do not usually come with contingencies, require extra time to secure financing, and tend to move more quickly to closing. As such, cash buyers tend to make purchases at lower prices than those who may need financing or come with contingencies.

Fallen home prices and record-low mortgage rates have pushed housing affordability to a 40-year high. Meanwhile, rental prices are continuing to rise at a fast pace, according to a new report released by Hotpads.com, a rental listing service.

Rental prices in 20 of the largest metro areas increased 3.75 percent in 2011, and prices are expected to continue to rise in 2012. Meanwhile, home prices fell by 1.83 percent in 2011, according to the report.

“In a lot of cases it’s getting to a point where it makes more sense for people to buy because rent has been going up significantly faster, while home prices have been falling,” Paul Gleger, author of the report, told AOL Real Estate.

According to the report, New York has the highest rental prices, with a two-bedroom apartment’s median rent at $2,653. Other cities posting some of the highest median rents in the country: Boston ($1,929), Miami ($1,748), San Francisco ($1,607), Los Angeles ($1,717) and Chicago ($1,552).

For nine consecutive weeks, the 30-year fixed-rate mortgage has been hovering at or below record lows of 4 percent, pushing housing affordability for home buyers even higher. But will these low rates stick around much longer?

The Federal Reserve has vowed to keep rates low through 2013 so rates likely will hang around for a few more months, at least, but whether mortgage rates will stay at the current record-lows, many experts say it’s unlikely.

The 30-year fixed-rate mortgage is expected to inch up to an average 4.5 percent for 2012 and increase to 5.4 percent in 2013, according to Freddie Mac economists’ forecasts. While that forecast means rates are expected to move higher in the coming months, the rates will still be low by historical standards, economists told the Los Angeles Times. For comparison, 30-year rates averaged more than 16 percent in 1981 and 1982. What’s more, until 2000, rates typically were above 8 percent, Freddie Mac notes.

Despite the drop in rates, however, many home buyers have been unable to take advantage of the low rates. Lenders’ tightening of their underwriting standards for loans in the recent years following the housing crisis has shut some buyers who have poor credit, low down payments, or unsteady employment from securing a loan at today’s low rates. Freddie Mac had predicted home-purchase applications to comprise two-thirds of all mortgage applications by the end of 2011. But the Mortgage Bankers Associations says that instead about 80 percent of the mortgage applications came from home owners who wanted to refinance.

Santa Clara County has 1984 condos and homes for sale. That breaks down to 1452 SFRs (Single Family Residences) and 532 PUDs (Condos and Townhouses). Pretty typical low inventory this time of the year as many of the occupied home seller take their properties off the market for the Holidays. The interesting thing is how low the inventory would be if you remove the 505 SFR and 269 PUD REO and Short Sales, or 774 distressed properties. That would break down to only 947 SFR and 263 PUD for a total of only 1210 total non-distressed properties in all of Santa Clara County. Now if you factor in the pending sales of 3079, you see despite what the media is saying, we are in a big seller’s market. If you are thinking of selling, call me, now may be a great time. There is very low inventory, very high demand and still crazy low interest rates.

Natural disasters from tornados, hail, winds, and floods caused widespread damage throughout the country in 2011, and more home owners may soon see their homeowner’s insurance premiums rise because of it.

The insurance industry has faced heavy losses in recent years from natural disaster, and insurers may be forced to raise costs of premiums, particularly in the Southeast and Midwest, Robert Hartwig, president of the Insurance Information Institute, warns.

“We’ve had record losses for four straight years,” Hartwig told USA Today. “My sense is that premiums will probably rise 4 percent to 5 percent.”

The average annual cost of homeowner’s insurance in 2008 was $791 and increased to $807 in 2010, according to data by the Insurance Information Institute. Hartwig told USA Today that he predicts the average premium for 2011 will be about $840.

Don’t be duped by mortgage fraud. Here are a few common scams and the red flags you should look for in a transaction.

Mortgage fraud is pervasive: An estimated $4 billion to $6 billion in annual losses result from mortgage fraud, according to FBI reports. “An entire community can be damaged by mortgage fraud,” says Rachel Dollar, a lawyer from Santa Rosa, Calif., and editor of the Mortgage Fraud Blog. Mortgage fraud can lead to a spike in foreclosures, home values plummeting, and lenders raising their rates and fees to recover losses.

The crimes are often complex, involving several parties and occurring over multiple transactions. To protect you and your clients, educate yourself about mortgage fraud and be on guard for any warning signs in a transaction. You can start by reviewing these five scams, and then test your knowledge by taking our Mortgage Fraud Quiz.

1. The Foreclosure Rescue Scheme

The Scam: “Rescuers” promise cash-strapped home owners that they can save their home from foreclosure. The rescue, which involves paying upfront fees, can take multiple forms, such as the perpetrator obtaining a new loan on behalf of the owner or by having the owner sign over the home’s deed and then rent the home until they can repurchase it. Eventually, the home owner loses the home, either to foreclosure or the fictitious rescue company.

Red Flags: With foreclosure rescue programs, borrowers are often advised to sign over the title of their house to a third party, become renters of their home, not contact their lender, or send mortgage payments to a third party, according to Fannie Mae, which provides fact sheets on mortgage fraud.

2. Loan Documentation Fraud

The Scam: This fraud involves numerous schemes in which a borrower provides inaccurate financial information — such as about their income, assets, and liabilities — or employment status in order to qualify for a loan with lower rates and more favorable terms. Occupancy fraud is one growing area: Borrowers say they plan to live in the property when they actually intend to rent it.

Red Flags: Documentation may raise suspicion if the employer’s address is shown as a post office box, accumulation of assets compared to the person’s income appears too high or low, the new house is too small to accommodate occupants, the person has no credit history, or the application is unsigned or undated, according to Fannie Mae.

3. Appraisal Fraud

The Scam: A faulty appraisal — saying a property is worth more than what it really is — is connected to many types of mortgage fraud. It entails manipulating or overstating comparables, market values, or property characteristics in order to obtain a higher appraisal. The higher property appraisal, which generates false equity, is done by falsifying an appraisal document or using an appraiser accomplice to obtain the higher value.

Red Flags: Be skeptical of appraisals that are dated prior to the sales contract, list comparable sales that do not contain similarities to the property or are outside the neighborhood, the owner is not the seller listed on the contract or the title, or a third party participating in the transaction orders the appraisal, Freddie Mac warns.

4. Illegal Property Flipping

The Scam: This entails purchasing properties and reselling them at inflated prices. These scams usually involve faulty appraisals and inaccurate loan documents. The property is then refinanced or resold immediately after purchase for an inflated value. The home is purchased at a higher price, often by straw buyers working with the “flipper,” and eventually falls into foreclosure.

Red Flags: Some key things to look for are rapid refinancing of a property; the seller recently having acquired the title or acquiring the title concurrent with the transaction; an appraisal that comes in too high; a property that was recently in foreclosure being purchased at a much lower price than its sales price; or the owner listed on the appraisal and title not matching the seller on the sales contract, according to Fannie Mae.

5. Short Sales Schemes

The Scam: Borrowers owe more than the current value of their home so they fake financial hardship and no longer make their mortgage payments. An accomplice of the borrower then submits a low offer to purchase the property in a short sale agreement. The lender agrees to the short sale, unaware that it was premeditated. The property, after being purchased at the reduced price, is then often resold at the home’s actual value for profit.

Red Flags: The borrower suddenly defaults on the mortgage with no workout discussions with the lender, an immediate offer is made to a lender at a short sale price, the short sale offer is less than current market value, or a cash back is offered at closing to the delinquent borrower (disguised as “repairs” or other payouts, for example) and is not disclosed to the lender, according to Fannie Mae.

The priciest ZIP code in the country boasts a median home price of more than $4.5 million, according to a new list by Forbes that tracked home prices of more than 20,000 ZIP codes nationwide to determine the most expensive areas. Here are the five priciest ZIP codes in the country, according to Forbes.

5. Beverly Hills, Calif.: 90210 Median home price: $3,469,891

With the job market still bleak, more adult children–particularly young males–are moving back in with their parents to cut housing costs.

About 19 percent of males aged 25 to 34 live with their parents–a 5 percent increase from 2005, according to new U.S. Census data. About 10 percent of women aged 25 to 34 live with their parents, an 8 percent increase since 2005.

President Obama announced Monday a plan to ease eligibility rules for home owners who want to refinance to take advantage of ultra-low mortgage rates and lower their mortgage payments. The administration hopes that by broadening its requirements for the Home Affordable Program that about 1 million home owners will now be able to qualify.

Here are more details about the newly announced changes to the program:

What is HARP?

It’s a program started in 2009 that allows home owners to refinance their mortgages at lower rates without having to meet the typical requirement of having at least 20 percent of equity in their home to do so. Under current guidelines, many underwater borrowers have been ineligible for the program because their home values had to be no more than 25 percent below what they owed their lender. Also, some home owners were unable to afford the closing costs and appraisal fees to participate.

What’s changing?

Many of the extra fees to participate in the program have been waived, and home owners’ eligibility won’t be contingent on how far their home’s value has fallen.

When will it take effect?

The changes could take effect by Dec. 1. HARP also is being extended through 2013 to allow more home owners the opportunity to qualify.

How successful will this be?

The administration hopes that by home owners being able to lower their monthly mortgage payments (with an average annual savings of $2,500 expected), they’ll be more likely to stay current on their mortgage and avoid foreclosure. Also, the administration hopes that it will then free up household money to start spending more on other things, which could provide an overall boost to the economy. However, the administration says it realizes that aiding the housing market requires much more than a refinancing plan.

“This is only one piece of a broader strategy to help the housing market,” says Housing Secretary Shaun Donovan. Donovan also notes federal efforts to help home owners who are delinquent on their mortgages and the unemployed.

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